CLEP Principles of Management cheat sheet

Scientific management (Taylor): separate planning from execution, use time-and-motion study, and select and train workers scientifically to maximize efficiency.

Administrative management (Fayol): five functions-planning, organizing, commanding, coordinating, controlling; fourteen principles including unity of command and scalar chain.

Bureaucracy (Weber): division of labor, hierarchy of authority, formal rules, impersonal relations, and merit-based careers produce rational-legal authority.

Hawthorne studies (Mayo): productivity responded to attention and social factors, not just lighting; founding evidence for the human relations movement.

Theory X assumes workers dislike work and need control; Theory Y assumes workers seek responsibility and self-direction (McGregor).

Systems theory: organizations are open systems converting inputs to outputs through transformation processes, with feedback and environmental interdependence.

Contingency theory: no universal management approach; structure and style depend on environment, technology, size, and task uncertainty.

Closed-system classical views emphasize efficiency and control; open-system views emphasize adaptation, boundary spanning, and equifinality (multiple paths to the same outcome).

Planning hierarchy: mission (purpose) → strategic goals → tactical plans → operational plans; each level narrows scope and shortens time horizon.

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound; specificity and feedback improve goal commitment.

MBO (management by objectives): jointly set goals, assign responsibility, review progress periodically, and tie evaluation to goal attainment.

Rational decision model: define the problem, generate alternatives, evaluate, select, implement, and evaluate results; assumes complete information.

Bounded rationality (Simon): cognitive limits produce satisficing-choosing the first acceptable alternative rather than the optimal one.

Group decision aids: brainstorming separates idea generation from evaluation; nominal group technique and Delphi method reduce conformity pressure.

Decision conditions: certainty (known outcomes), risk (probabilities known), uncertainty (probabilities unknown); expected value = sum of (probability × payoff).

Escalation of commitment: persisting with a failing course of action due to sunk costs; remedies include pre-set exit criteria and outside review.

Chain of command is the unbroken line of authority; span of control is the number of subordinates reporting to one manager-wider spans flatten the hierarchy.

Authority types (French and Raven): legitimate, reward, coercive, expert, and referent; referent and expert authority rest on personal influence.

Delegation transfers authority and responsibility for a task while accountability remains with the delegating manager.

Departmentalization bases: functional, product, customer, geographic, and matrix; matrix creates dual reporting and potential role conflict.

Centralization concentrates decision authority at the top; decentralization pushes it downward, increasing speed and local responsiveness.

Line positions have direct authority over core operations; staff positions advise and support without direct command authority.

Mechanistic structures are rigid, specialized, and hierarchical; organic structures are flexible, broad, and network-like-fit structure to environment.

Job design: job enlargement adds tasks at the same level; job enrichment adds planning and control responsibility (vertical loading).

Leadership is the ability to influence others toward goal achievement; management focuses more on order and control, leadership on direction and change.

Trait theories assume leaders share innate characteristics; behavioral theories instead examine task-oriented versus relationship-oriented behaviors.

Ohio State studies: initiating structure (task focus) and consideration (people focus); Michigan studies: production-centered versus employee-centered.

Blake and Mouton's managerial grid plots concern for people against concern for production; 9,9 is team management.

Situational leadership (Hersey and Blanchard): adapt style-telling, selling, participating, delegating-to follower readiness.

Path-goal theory (House): leaders clarify paths to goals using directive, supportive, participative, or achievement-oriented styles depending on task and follower.

Fiedler's contingency model: leadership effectiveness depends on style (LPC score) matched to situational favorableness (leader-member relations, task structure, position power).

Motivation theories: Maslow (hierarchy), Herzberg (hygiene vs. motivators), Vroom (expectancy: effort→performance→outcome valence), and equity theory (input/output fairness).

Communication process: sender encodes → channel → receiver decodes, with noise and feedback; channel richness ranges from face-to-face to impersonal reports.

Control cycle: establish standards → measure actual performance → compare against standards → take corrective action.

Control timing: feedforward (prevent problems before input), concurrent (monitor during process), and feedback (correct after output).

Management by exception directs attention to significant deviations from standards, conserving managerial time.

Budget types: financial (cash, revenue, expense, capital) and operating (sales, production, materials); zero-based budgeting requires justifying each expense from zero.

Ratio analysis categories: liquidity (current ratio = current assets ÷ current liabilities), leverage, activity (inventory turnover), and profitability (return on sales).

Balanced scorecard tracks four perspectives: financial, customer, internal processes, and learning and growth.

Total quality management: customer focus, continuous improvement (kaizen), employee involvement, and fact-based decision making; Deming emphasized statistical process control.

Control–performance link: controls must be timely, accurate, flexible, and accepted by employees; excessive control can reduce initiative and increase resistance.

Globalization stages: domestic → international (export) → multinational → global; each stage increases foreign commitment and integration.

Entry modes by control and risk: exporting (lowest), licensing, franchising, joint venture, strategic alliance, wholly owned subsidiary (highest).

Hofstede dimensions: power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, long-term orientation, and indulgence/restraint.

Culture frameworks: Trompenaars (universalism vs. particularism), Hall (high-context vs. low-context communication), GLOBE (leadership dimensions across cultures).

Comparative advantage: nations benefit by specializing in goods they produce at lower opportunity cost; absolute advantage means producing more with the same inputs.

Trade barriers: tariffs, quotas, embargoes, subsidies, and local-content rules; regional blocs include EU, USMCA, ASEAN, and Mercosur.

Contemporary issues: workforce diversity, ethics and corporate social responsibility, sustainability, technology and automation, and remote/hybrid work design.

CSR pyramid (Carroll): economic, legal, ethical, and philanthropic responsibilities, in that order of priority.